Bill Frezza is a 35-year veteran of the technology industry. After graduating from MIT with degrees in both science and engineering, Bill spent his early years at Bell Laboratories. Since then, he has worked as a product manager, salesman, marketer, entrepreneur, consultant, technology evangelist, and venture capitalist. Bill holds seven patents and has been investing in early-stage tech startups for the last 17 years as a partner in a venture capital firm. Since 2008, he has been writing weekly opinion columns for publications such as RealClearMarkets.com, Forbes.com, the Huffington Post and Bio-IT World and appeared regularly on TV and radio outlets, including CNBC, Fox Business and WBAL. In 2011, he was a finalist for the Hoiles Prize for excellence in American journalism and in October 2013, he became the Competitive Enterprise Institute’s 2013-2014 Warren T. Brookes Journalism Fellow. In January 2014, Bill began hosting RealClear Radio Hour airing Saturdays on Boston’s WXKS 1200AM & WJMN 94.5FM-HD2.

Governor Walker's Victory Spells Doom For Public Sector Unions

Public sector unions have reached their high water mark. Let the cleanup begin as the red ink recedes.

Despite a last-minute smear campaign accusing Scott Walker of fathering an illegitimate love child, the governor’s recall election victory sends a clear message that should resonate around the nation: The fiscal cancer devouring state budgets has a cure, and he has found it. The costly defeat for the entrenched union interests that tried to oust Walker in retribution for challenging their power was marked by President Obama’s refusal to lend his weight to the campaign for fear of being stained by defeat. We’ll see how well this strategy of opportunistic detachment serves in the fall as Obama reaches out to unions for support.

This fight is not without precedent. Progressive patron saint Franklin Delano Roosevelt—who more than any other president set our country on a course away from the founding principles of limited government—knew that public sector unions would be the death of the social welfare state he worked so hard to create. Hence, he consistently opposed allowing government employees to unionize. Today, Greece sets the example of what happens when public sector unions gain the upper hand.

In 1959 Wisconsin became the first state to allow collective bargaining by government employees. The projected cost of supporting Baby Boomer union retirees now threatens to bankrupt the state, as it does many others. Scott Walker ran for office promising change. The fiscal medicine he is administering may be bitter, but it looks like it is starting to work. The state budget has been balanced. The unemployment rate has been dropping and is now below the national average. Property taxes are down. Fraudulent sick leave policies—which allowed employees to call in sick and then work the next shift for overtime pay—have been ended. The government has stopped forcibly collecting union dues from workers’ paychecks.

Best of all, the myth that union bosses represent their members’ interests has been exposed as a lie. Now that union dues are voluntary, tens of thousands of union members have stopped paying them. Membership in the Wisconsin chapter of the American Federation of State, County and Municipal Employees union (AFSCME) has dropped by half. Membership in the state’s American Federation of Teachers (AFT) is down by over a third. Given unions’ influential role in most elections, the national implications of this trend are staggering.

Walker’s message is clear: The key to bringing balance back to public sector labor relations and balance state budgets is to break the iron triangle of closed-shop mandatory unionization, compulsory dues collection, and oversized campaign donations to politicians that promise to do the unions’ bidding. If other governors take his cue and take up the cause, that giant sucking sound you hear will be the air coming out of union bosses’ bloated political action budgets.

The work in Wisconsin is not complete. The controversial law exempted police and firefighters, a political concession to get the legislation passed. Federal courts have zeroed in on this anomaly, striking down certain sections of the law because they do not treat workers equally. This needs to be repaired— by rescinding the exemption for public safety workers. With the recall election behind him, Walker may be sufficiently emboldened to do just that.

The power of private sector unions was long ago broken by many heavily unionized companies going bankrupt. While this was painful for both workers and shareholders, the economy motored on as nimbler non-union competitors picked up the slack. This approach is problematic for the public sector because bankrupt state and local governments cannot be replaced by competitors waiting in the wings. Yes, citizens can always vote with their feet, emptying out cities like Detroit, leaving the blighted wreckage behind. But isn’t Walker’s targeted fiscal retrenchment less painful than scorched-earth abandonment?

Chicago machine candidate Barack Obama rode into office to the tune of Hail to the Chief, promising the unions that backed him the gift of card check elections, ending the secret ballot that shields employees from union intimidation. He may well ride into retirement to the tune of On Wisconsin as the era of closed shop unionism comes to an end.

Bill Frezza is a Boston-based writer and venture capitalist. You can find all of his columns, TV, and radio interviews here. If you would like to have his columns delivered to you by email, click here or follow him on Twitter @BillFrezza.

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Education should be re-shaped. Over 50% of all education can be done on the internet, with text, video, instant chat, referring links, it would actually be better and would allow kids to excel to their maximum potential.

Spot on, Biz Duck! Over the internet every student can be taught by the BEST teachers in the business. Teachers will be going the way of the printed newspaper – into the dustbin of history. We would still need ‘coaches’ to help individual students who struggle, but not over-paid, over-educated (being generous here, considering these are education degrees) staff.

when will you dummies wake up, while your stuck in this Left/ Right paradigm!!!!you really think the Unions are the problem, by all means im not a fan of the unions but in this case they are right,,, Wisconsin is in fiscal trouble( kinda like the entire USA) and Scott Walker best solution is” the Teachers are going to have to flip the bill!!(kinda sounds like the 15 trillion Debt, that the hardwaorking taxpayer will have to pay for , thanks Obama) does that sound right to you,,,, Scott Walker says those evil teachers are paid way too much and you dummies just eat it up… good luck with that,,, i smell vote fraud..

Just as the Greeks refused to accept austerity, the unions in this country will likewise resist any effort to work with elected office-holders in diminishing their (perceived) power. They would rather bankrupt businesses and governments than concede to common sense fiscal policy. There is no alternative other than to destroy them. Sorry, Gov Walker, you are dealing anarchists.

Portents well for further reforms in other states & the fed level, too.

FDR was absolutely correct in warning against unionizing government emploees; too bad we had to get to the brink of bankruptcy before someone like Gov. Walker had the guts to stand up to the abuses & the union bosses and say, ENOUGH!!

Hey, where are all the Big Mouth Liberals today? You were all mouthing off about how Walker was going to lose and that the election was razor thin, and Blah, Blah, Blah, Yada, Yada. Looks like you fools bought into the crap your fellow Progressives were putting out in the media. Looks like the good folks of Wisconsin got tired of the Bullies in the DNC and the Unions.